Bombardier Says CSeries First Flight Will Boost Sales

Bombardier has always claimed it does not want to compete directly with Airbus and Boeing. But the recent stretch of the CS300 to allow for 160 seats does exactly that.

Late in development, Bombardier has extended the fuselage of the larger CS300 by 2 ft., adding a seat row—five passengers—to the baseline version. The addition of an optional second pair of over-wing exits, reduction of the seat pitch to 28 in. from 32 and use of slimline seats boosts maximum capacity to 160 passengers. The first announced customer is Air Baltic, with 10 CS300s on order and options for 10 more.

Growth from the CS300's previous capacity limit of 149 seats takes the larger version of the CSeries into Airbus and Boeing territory above 150 seats. Low-cost carriers such as EasyJet operate the Airbus A319 in a 156-seat configuration already, and the A320 is typically equipped with up to 180 seats in that segment. While Bombardier seems to hope that the extra capacity will be more attractive to a broader base of potential customers, others remain unconvinced.

One open question is whether the move up means Bombardier is indirectly conceding that the 100-149-seat niche is not big enough. Historically, all manufacturers have had difficulties building efficient aircraft in the small narrowbody segment. But Bombardier has argued that was because, unlike the CSeries, previous aircraft were shortened derivatives not optimized for the niche.

Influential voices continue to express skepticism about the prospects of the CSeries. “It's an aircraft that is attractive from a design point of view, and in terms of its operating economics, but there are a couple of factors that have hindered sales,” says Air Lease Corp. CEO Steven Udvar-Hazy.

At the Istat Americas 2013 conference in Orlando, Fla., Udvar-Hazy told Aviation Week, “it is not a family of aircraft,” and its better fuel burn will be offset by the infrastructure costs of supporting new avionics, engines and other systems. Moreover, lease rates for existing aircraft have dropped since the program's launch. “Today, you can get 6-7-year-old A319s at less than half the monthly rate of a new CSeries,” he said. “So we have an aircraft that overall is not probably where it needs to be.”

And when it comes to campaigns for new aircraft, Airbus and Boeing have made it clear that they are willing to use pricing as a tool to keep Bombardier away from their customer base. Some airlines are prepared to purchase older technology if the pricing is right, as evidenced by the likely announcement next week of a Ryanair order for 200 Boeing 737NGs for which the carrier is believed to have secured discounts well in excess of 50% over list prices. At such rates, the economic case even for the latest-generation 737 MAX is difficult to make, let alone for a much smaller aircraft. Delta Air Lines recently agreed to lease AirTran Airways' entire fleet of 117-seat Boeing 717s from parent Southwest Airlines in a deal that Delta CEO Richard Anderson described as too good to walk away from. Bombardier has hoped to sell the CSeries to Delta.

The Canadian manufacturer has pitched the 160-seat variant in three major campaigns recently at Air Asia, EasyJet and Vueling. Air Asia opted for the larger A320NEO; EasyJet and Vueling have not yet made a decision.

John Strickland, head of JLS Consulting, says it is difficult to imagine carriers such as EasyJet being attracted to the 160-seat CSeries option. He argues that Europe's second-largest low-fare airline already wants an average aircraft size closer to 180 seats, which would not be easy to achieve with a sub-fleet of 160-seaters. EasyJet operates the A319, its smallest type, in a 156-seat layout, close to the maximum of the CS300, but with a more comfortable seat pitch. It is evaluating the A320NEO, 737 MAX and CSeries for a large order.

Vueling, the Spanish low-fare airline, is another key European target, as CEO Alex Cruz is interested in the 160-seat option. But Strickland says any decision on a new aircraft type will depend on the outcome of the International Airlines Group (IAG) bid to take over Vueling. If the airline was to be integrated into IAG, parent of British Airways and Iberia, it could be allocated more flying on secondary routes for which the CS300 would be more suitable than a larger aircraft.

Even Air Baltic, which has been highly supportive of the idea of making the CS300 larger, plans to install only 145 seats initially, at 30-in. pitch, but it could change to the higher density later, if its business model warrants. CEO Martin Gauss says the longer fuselage is not a concern because Bombardier has committed to keeping the gross weight essentially unchanged. Despite the stretch, the aircraft still maintains a 5-ton weight advantage over the A319, he says.

Mike Arcamone, president of Bombardier Commercial Aircraft, says that the company remains focused on its original 100-149-seat market, and the 160-seat option is simply an “optimization” of the aircraft.

The extra capacity reduces cash operating cost by 8%, and Bombardier hopes to persuade airlines that flying a CS300 full is less expensive than flying a larger Airbus or Boeing at less than full capacity. “The 160-seat CSeries will have the same seat-mile cost as a 180-seat aircraft, so if the airline cannot fill a larger aircraft, it can still operate at the same cost advantage,” says Rob Dewar, vice president and general manager for the CSeries.

The aircraft can be ordered with the extra exits installed, or they can be retrofitted later to increase capacity, as structural provisions will be standard in all CS300s.

Modification of the CS300 design, and its knock-on impact on the CS100 because of commonality, was partially responsible for delays that forced Bombardier to push first flight back by six months from December, Dewar says. Following the “re-harmonization” of supplier delivery schedules, he says the program is tracking to a plan that requires delivery of one CSeries a month to support an “aggressive” 12-month flight-test effort leading to Transport Canada certification of the CS100 in mid-2014. First flight of the CS300 is now scheduled for early 2014, aiming for certification by the end of the year.

Three of the five CS100 flight-test aircraft are nearing completion at Mirabel, near Montreal; the fuselage barrel for the fourth has been delivered to Mirabel by SAC Commercial Aircraft, based in Shenyang, China; and the cockpit for the fifth is being prepared for delivery from Bombardier's plant in St. Laurent, Quebec. SAC was blamed for some of the program delays, but it is now producing fuselage barrels at a rate of one a month, Arcamone says, adding that “component quality is excellent, and they are meeting their delivery schedule.”

The first CSeries is expected to be handed over for flight-testing by the end of the month. The complete-airframe structural test article, meanwhile, has completed its first two tasks: a pressure test and the wing maximum bending test, which simulates a gust upload to 115% of design load, the most the carbon-fiber wing is expected to see in service. The tip deflected 5 ft., which is within predictions, Dewar says. The fly-by-wire control system is “tracking to plan,” he says, and the integrated aircraft systems test rig and engineering simulator are engaged in safety-of-flight testing in support of first flight.

By the standards of A320NEO and 737 MAX sales, 300 firm orders from 20 airlines by entry into service is a relatively modest target, but, five years after its launch, the CSeries order book now stands at 148 aircraft for 13 customers. That total is expected to reach 180 at the end of this month, when the shareholders in Russian lessor Ilyushin Finance will be asked to approve a firm order for 32.

At the March 7 unveiling of the first aircraft in Mirabel, Bombardier touted the program's progress toward a rescheduled first flight at the end of June, a milestone the company expects will bring new orders.

Bombardier projects a market for 7,000 aircraft in the 100-149-seat category over the next 20 years, but it does not have an estimate for the incremental potential up to 160 seats. “We have not quantified how many more customers it will bring, but it will definitely be more, because we are offering another option,” Dewar says.

While the larger CS300 is being promoted as offering “the best economics in the industry,” the smaller CS100, covering the 100-125-seat market, continues to be targeted at airlines wanting “superior runway performance” for operations from the likes of London City Airport and Stockholm Bromma Airport. “The two aircraft are different,” Dewar says. Deliveries will begin with the CS100, the first of which will go to an “undisclosed customer seeking a competitive advantage,” he says.

Playing down the significance of the delay, and the lack of orders, Bombardier Chief Financial Officer Pierre Alary says the company is planning a “very, very slow ramp-up” in CSeries production: 30 aircraft in the first full year after entry into service, 60 the next year and the full 120-a-year rate in the third year. If Bombardier hits its mid-2014 CS100 delivery target, the manufacturer would hand over just 15 aircraft in 2014, rising to 45 in 2015. “It is really a gradual ramp-up,” he says.

While this gives Bombardier more time to build its backlog, the slow production increase will prevent the buildup of inventory before certification, Alary says, and avoid the time and cost of having to rework aircraft with changes from flight-testing before delivery. The slow ramp-up will also give Bombardier and its suppliers more time “to set up manufacturing to be as efficient as possible as quickly as possible,” he says.

As for those missing sales, Alary says airlines refrain from placing orders for a new aircraft for several reasons, including development risk, uncertainty about certification timing and the need to see how the aircraft performs. “Risk gets eliminated as the program progresses,” he says. “First flight is a milestone toward retiring development risk and could be a catalyst for orders. There are customers waiting.”